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Purchase Of Freehold On Leasehold House

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Hello, just after some advice as there appears to be some helpful people around on here on this subject!
 

I'm looking at buying a detached house, estate agent told me its freehold, turns out its not (a different argument to have with them later, along with many other arguments about their general extremely poor/possibly illegal/definitely immoral conduct), but it's not initially put me off too much, i will probably proceed if I can settle some nerves around the lease. The lease isn't too onerous from my reading and conveyances report, 250 years remaining, £20 ground rent (no increases) etc. however, there are minor items like not being allowed to build a porch or change the type of boundary fence which makes it my intention would be to purchase the freehold in due time (please no advice on whether or not to buy it given the low rent). Also freehold will make it more saleable in future. 

 

So in terms of the paperwork;

 

1) The freehold title absolute states the proprietor as a company that is dormant, does this mean the ground rent isn't payable?/none of the clauses are enforceable anyway? (I've no intention or need to go against the terms of the lease in the near future anyway)

2) This title register then refers to the lease 

3) The lease title then states three parties to the lease, none of which are the company in the title absolute of the freehold. Or the current owners.

4) These three parties, two companies (both I cannot find any information from, presumed liquidated?) and one person, whom I can find no information on. 

5) The title absolute of the lease title states the proprietors are the current owners of the house.

6)  The lease itself does not mention, no any signatures by, the current owners. It's got the three parties as mentioned on the lease title but no mention of the company on the freehold title.

 

Basically, I'm a little confused. As the freeholder, should this company not be referred to in every document on here? As they aren't, who are the parties in the lease and what relationship are they to the freeholder? Or is there another lease that I don't have between the parties of this properties lease and the freeholder? Do I need visibility of this? Is it even possible to easily purchase the freehold of the property after i've been in there two years or is this a big mess of paperwork that would become expensive with solicitors fees? With the title absolute proprietor being a dormant company, is this even possible? Or does dormant make it super easy to purchase?/

Finally, and on that point, i can find a lot of information on the value of the freehold (and so so much information on flats, collective enfranchisement etc), but very little on detached house enfranchisement, especially around what "REASONABLE" costs are for the legal side of matters. Especially if covering the freeholders costs would be my responsibility. Is £200 each reasonable? £500? £2500? 

 

Any assistance in clarifying the above, or even just "what we paid" information of anyone in a similar circumstance would be hugely appreciated!

Thanks

Sam

Edited by stogg

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The current leaseholder is presumably paying ground rent.  Find out who they are paying it to.  At a fixed £20pa it may not be cost effective to purchase the freehold.  Just asking for a quote for the freehold may cost you the equivalent of several years ground rent.  However, you do have good grounds for reducing your offer.

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Agreed, I was charged £90 just to get a quote,  which turned out to be ridiculous, but  how do you know that  without paying for a quote ?

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You don't pay for a quote on the freehold, if the company is trying to play those games just ignore them completely and let your solicitor deal with them.

 

If you're buying a leasehold place have the seller issue notice, they can transfer that to you in the sale which means you don't have to wait several years to do them same yourself.

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Thanks for the responses guys but the question here isn't about whether or not to buy the freehold, just surrounding the parties involved,  clarifying the situation and legal costs of the purchase based on peoples experience.

 

I do take on board your comment Geared though, if they serve notice it's not a problem if it's under their name and not mine? I suppose my concern is whether htey are serving notice to the parties mentioned in the lease, or the other company mentioned in the freehold title that aren't referred to anywhere else.

 

thanks

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1 hour ago, stogg said:

if they serve notice it's not a problem if it's under their name and not mine?

I believe it's transferable, which is why they serve notice before the sale.

 

If you need proper advice then contact @Jeffrey Shaw, he's a moderator on this forum but also a solicitor in this very field.

Contact info

Edited by geared

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On 29/09/2019 at 20:45, geared said:

You don't pay for a quote on the freehold, if the company is trying to play those games just ignore them completely and let your solicitor deal with them.

 

If you're buying a leasehold place have the seller issue notice, they can transfer that to you in the sale which means you don't have to wait several years to do them same yourself.

I didn't have a solicitor, I was simply wanting an idea of the likely cost, and I guess engaging a solicitor to get a price would have been similarly expensive.

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Whatever they quote you could have no relation to the actual cost of buying the lease  though, they can quote you what ever the hell they fancy.

You're essentially asking them "How much do you want for this" and they paying £90 for the privilege.

 

Engage a solicitor to exercise your right to enfranchisement and you're not going to get mugged off, you also have no need to contact the freehold company.

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The free guide to  purchase  of the freehold title for  a leasehold house  can be downloaded  from www.lease-advice.org .

 

The annual ground rent is payable under the lease  but if the sum  is small and  cost of collection  is  high  , the freeholder company may  not  bother to issue annual   ground rent demands  .  The demand for payment of ground rent  may  be sent   after 6 years .  

 

A  freehold company  has to file  an  annual report to Companies House  but  if there is no rental income during the past year , it can file an  annual report as a "dormant company".

 

For the records  kept  at Land Registry, the property will have a freehold title and a leasehold title  ( for 250 years lease ) .  A leaseholder  ( of a House ) after 2 years, can make compulsory purchase of the freehold title ( for  leasehold  house ) under the L&T Act 1967.  

 

The FTT has powers to  decide the cost of buying the freehold title.   For leasehold houses on 999  years lease and low ground rent , the FTT have decided the cost at around 18 x annual ground rent  for some recent  cases. 

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Plus you pay for the legal fee's for both sides, but you shouldn't let that put you off.

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I doubt that a detailed discussion of OP's financial position is suitable for this Forum. Posts so far summarise the way forwards but always be guided by your own solicitor who should be  au fait with leasehold conveyancing technicalities and who has verified ownership of all estates/interests on your house.

 

Also:

 

POST #4: I agree. Do not pay any up-front fee, however described, to the Landlord (freehold reversioner) or to anyone on its behalf . The only such payment before completion might be a statutory deposit, if demanded following service of a Notice of Claim, set- by law- at the greater of:

a. £25; and

b. three times the ground rent.

 

POST #10- the Act is the Leasehold Reform Act 1967, not the Landlord and Tenant Act.

Edited by Jeffrey Shaw

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